Ian Landsman is Starting From Scratch, November 5, 2006:
DropSend Sale
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The relatively well known service DropSend is putting itself up for sale so that it’s founders can focus on their newsletter ad service. The sale notice is a bit odd in that they go out of their way to say it only takes a few minutes a day to maintain. That begs the question of why you would sell a profitable and growing business (according to them), which requires such little upkeep. Surely you could use that income while the new service gets up and running.
It sounds like lots of folks are interested in acquiring it. My take on it is that the business may be growing and profitable, but perhaps they understand a bit more about the industry than their potential suitors. For instance, they may think the large file service business will be going away in the near future due to increased capacities of gmail/aol etc. It will be interesting to see how this plays out.
Discussion
It seems that 'We don't have time to focus on it anymore because of other projects' has become the standard reason behind every web app thats being sold these days. The real reason most of the time is that the owners just don't want it anymore and just want to cash it for what its worth.
I agree with what you said. If its profitable, why not just use the money to build Amigo? I think Dropsend might be profitable, but Amigo probably wouldn't be. And they just want to get what they invested in Amigo back fast, and move on to a new product.
I'm very sure we'll be hearing about a new product from Carsons systems in 2-4 months if this sale is successful.
Created by Ali on 11.05.2006 6:00 pm
I bet it's profitable in the "we make $2500 a month or so" but we'd rather have $300k right now sense. I don't believe the lack of resources as much as they think they can do better having a lot of cash now instead of a steady growing (but maybe declining income). Perhaps they doubt the long term viability.
I expect their next post to have lots of numbers reflecting how the business is doubling every day or whatever, but revenues will be nothing great.
Created by Phil on 11.05.2006 6:21 pm
@Phil: Thats exactly what I was thinking too. They want to have the $300K upfront rather than have $3k every month.
Created by Ali on 11.05.2006 10:20 pm
It makes sense to a degree, and the upside of Amigo is definitely more than DropSend. It will be interesting to see who buys it. I think it will make more sense for someone who simply needs a storage interface for an existing product than keeping DropSend as it is stand alone. At least that's what makes sense to me since I believe they're selling because they don't believe in the future of the market.
Created by Ian on 11.06.2006 11:42 am